Should I include my tax refund into my 6 months of pre-bk income?

[so-beyond-broke]

Hello Everyone:


I received my federal income tax (about 4,000) in February - $859 came from federal withholding while the rest was from the EITC & child tax credits. It helps to have 3 kids. I also got my state return (only 400). I have been spending the $$ wisely as many people at this site has suggested. The trustee can't take something that's already spent and gone on necessary things. Should I include this $4400 and divide over the six months? It averages an additional $733 a month. I am from NY with a family of 5 - 3 kids and my SO w/o any income his unemployment if he had it would have been exempted in the figures. My 6 month avg. gross income is $1,778, my son's SSI is $411 (exempted income) and with the $733 (in tax refunds) the total would be $2,922 or $17,532 for 6 months way below the median income of $76,000 for a family of 5.

If I do calculate the refunds into my 6 months prior to filing do I just include the portion that's the EITC and Child tax credits? After all $859 federal withholding was based on gross income in 2005 - taxes I already paid into.

Did any of you who received your tax refund include it as part of your income for the prior 6 months to filing? Do you plan too?

Thanks

sbb

[SinkingFast]

I sold some jewelry in November. I specifically asked attnys if that was to be included in the 6 months of income. They asked if I sold from more than I paid. I said Nope. They said Nope.

Tax refunds are generally regular income you shoulda had in your pocket all along, but over paid to the government.

The IRS does ask about "Taxable refunds, credits, or offsets of State and Local Income Taxes" on Line 10 of the 1040. There's a worksheet to calculate the portion, if not all, of the previous year's State income tax refund as taxable income. So, depending on how you file taxes, some portion, or all of your '05 income tax refund from your State will be considered income when you filed taxes in '06.

Just a guess here, but,............. If the IRS counts State income tax refunds as income, then it's income for BK purposes. Much of BK code is built on IRS standards and Census Bureau criteria.

But I would think, and this is just a guess here, if the State income tax portion of the refund is considered income,.......... Wouldn't you divide that refund amount by 12?? That income tax refund is from earnings for the whole year of 2005. If that's the case, a $400 State income tax refund would add about $35/month to your income.

To be sure, it would be best to ask attny's.